Then there's stories like this:
Massachusetts man fights $250G student loan debt for his 3 kids
A Massachusetts man who owes about $250,000 he borrowed to put three children through college has won a major court victory in his effort to have the debt forgiven.Really, there's just so much wrong with this story, I don't know where to begin. On its face, it seems like a loving father that got in too much debt putting his kids through college. I can see that happening, especially if his kids got into prestigious Ivy League schools and didn't qualify for financial aid.
The Boston Globe reports that a federal appeals court has urged a bankruptcy judge to consider a settlement with the company that holds the loans to allow Robert Murphy, of Duxbury, to erase the debt.
Except for this story that sheds a little more light on the situation. Like this:
Murphy sought to discharge the $246,000 he still owed on a dozen Parent Plus loans he took out between 2001 and 2007 to send two of his children to Loyola University Maryland and a third to the University of Connecticut and Bridgewater State.Wait, wait wait... "Most" of the loans were issued when he was unemployed? He took on a minimum of a little more than half that debt after losing his job? And was unemployed for 14 years? Holy lack of personal responsibility, Batman!
“If I knew I was going to be in the situation I am today, I wouldn’t have borrowed,” Murphy said. Even though he was unemployed when the government issued him most of the loans, he said, he believed he’d find another high-paying job and be able to repay them.
But that's not what got me going. What got me going was that this guy spent nearly a quarter of a million dollars sending three kids to college, and one of the kids went to state schools.
No one else sees the real problem here? Bridgewater State - NOW - is under $10K a year for tuition, fees, and books. U Conn out of state (but in New England) is $20K a year. Assuming a 50:50 mix, let's say $50K of dear old dad's debt is from the one kid going to state schools.
That means the other $200K is split between the other two kids. $100K each, or $25K a year, in 2001 dollars. I tried to get a handle on whether this is reasonable or not, so I looked up the cost of Loyola University Maryland. Take a guess what a year costs there. Just guess.
It's $58,800 when you tally up room & board, meals, fees, etc. That doesn't even factor in books, so easily over $60K a year once you factor in books and other educational costs. $60K. Sounds like dad got off light.
Why is no one talking about the elephant in the room? Why is no one questioning why on earth it costs a gorram CADILLAC EVERY YEAR to go to a private university? Politicians complain about the loans, about the interest rates, etc. but no one bats an eye at a school charging over $60 grand a year? FWIW, Harvard is about the same price. U. Mass Amherst is $28K a year (in-state) with tuition, fees, room and board. A middle-of-the-road state school is nearly $30K a year?
Check this out, for U. Mass. In 1996, tuition and fees (MA schools "held tuition constant" while raising "fees" every year so they could claim, with a straight face, that "tuition" hasn't increased...) were $5,500. In 2015-2016, they were $14,100. In 20 years - one generation - the cost to go to U. Mass Amherst has very nearly tripled. The average cost of a car in 1996 was $16,000. If the price of cars kept pace with state college tuition, a new Toyota Corolla would cost $48,000. Instead, it costs $17,300, a tiny fraction of an increase in 20 years.
So, no. I don't buy it when some mealy-mouthed politician says that banks are the problem behind the high price of college.
But no one's asking why the price of college has tripled in a generation. No one. Bernie Sanders wants to give college away for free - sure, Bern, tell us how that's going to work. You've got college tuition kicking the living snot out of inflation, but magically it's going to become free thanks to... um... your magic unicorns? All of a sudden administrators and professors are going to administrate and profess for free? Pull the other one, it's got bells on.
But yeah, the real scandal is that a college loan interest rate is very slightly higher than that of a new car...
That is all.